Equities slump as yield curve inverts - 15.8.2019

Dollar rise slowed as export prices decline

US stock indexes closed sharply lower on Wednesday as the US Treasury yield curve inverted. The S&P 500 lost 2.9% to 2840.60 . The Dow Jones industrial average dropped 3.05% to 25479.42. Nasdaq composite index fell 3.02% to 7773.94. The dollar strengthening decelerated as US export prices recorded a decline over the same period a year ago in July too. The live dollar index data show the ICE US Dollar index, a measure of the dollar’s strength against a basket of six rival currencies, inched up 0.1% to 97.95 and is higher currently. Stock index futures point to higher market openings today

DJI falls below MA(200) 08/15/2019 Market Overview IFC Markets chart

DAX 30 leads European indexes retreat

European stocks pulled back on Wednesday on weak data and heightened recession fears. Both the GBP/USD and EUR/USD continued their slide yesterday with both pairs rising currently. The Stoxx Europe 600 fell 1.8%. Germany’s DAX 30 dropped 2.2% to 11492.66 as data showed German economy shrank 0.1 over quarter in the three months from April to June. France’s CAC 40 fell 2.1% and UK’s FTSE 100 lost 1.4% to 7147.88 as UK inflation remained at 2%.

Chinese stocks rise while Asian indexes retreat

Asian stock indices are mixed today after 30-year Treasury bond yield fell below 2% level for first time. Nikkei ended 1.2% lower at 20405.65 despite yen resuming its slide against the dollar. Chinese stocks are rising as President Trump suggested a meeting with President Xi Jinping to resolve the Hong Kong crisis: the Shanghai Composite Index is up 0.3% and Hong Kong’s Hang Seng Index is 0.5% higher. Australia’s All Ordinaries Index tumbled 2.9% as the Australian dollar resumed its climb against the greenback.

Brent falls after another US crude inventories build

Brent futures prices are higher today. Prices slumped yesterday after the Energy Information Administration report US crude inventories rose for the second week in a row, increasing by 1.6 million barrels, while gasoline inventories fell by 1.4 million. October Brent crude tumbled 3% to $59.48 a barrel on Wednesday.